The National Labor Relations Board has continued its recent spate of employee-friendly decisions with a new one that will require employers to think through work rules, policies and handbook provisions to determine whether they could–hypothetically, from an employee’s perspective–restrict an employee’s Section 7 rights. 

On August 2, 2023, the National Labor Relations Board (“NLRB” or “the Board”) issued a 3-1 split decision in Stericycle, Inc., bringing back and modifying a prior standard for assessing whether an employer’s facially neutral work rules and policies unlawfully “chill” an employee’s Section 7 rights. Under the new standard, the NLRB will peer through the lens of a “reasonable employee” (more on that below) to determine whether an employer’s work rules and policies have a tendency to restrict Section 7 rights. For employers, this means a complete reassessment of their workplace rules and policies–and the handbooks that those rules and policies are housed in.

The new standard: reasonable tendency to “chill” Section 7 rights, from the employee’s perspective

The new standard (which is the Board’s prior Lutheran Heritage standard, brought back to life and modified) requires the NLRB General Counsel to prove that a challenged work rule has a reasonable tendency to “chill” employees from exercising their Section 7 rights. (Quick reminder: Section 8(a)(1) of the National Labor Relations Act (NLRA) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7” of the Act, including the right to form, join or assist labor unions, to bargain collectively and to engage in other concerted activities for the purpose of collective bargaining.)

How is this done? That’s the rub for employers.

As an initial matter, the Board will interpret the challenged work rule from the perspective of an employee who is (i) subject to the rule, (ii) economically dependent on the employer, and (iii) also contemplates engaging in a protected concerted activity.

In addition:

• The employer’s intent in maintaining the rule in question is immaterial. (So even if the employer had no  intent to restrict an employee’s Section 7 rights when developing the work rule or policy–which we suspect will usually be the case–it isn’t material.)
• The General Counsel will carry her burden if an employee (that same employee described above) could reasonably interpret the rule to have a coercive meaning–even if a contrary, non-coercive interpretation of the rule is also reasonable. All emphasis is ours here, to highlight that the General Counsel’s burden is extraordinarily low. If the General Counsel carries her burden, the challenged work rule is presumptively unlawful.
• BUT, employers have a chance at rebutting the presumption. The presumption can be rebutted if the employer can prove that the rule advances a legitimate and substantial business interest and that the employer cannot advance that interest with a more narrowly tailored rule. If the employer proves this, the work rule will be found lawful.

What does this mean for employers?

The Stericycle standard has the potential to render a multitude of employment policies and workplace rules unlawful, and will be applied retroactively. Employers should review existing (or new) employee work rules, policies, and handbook provisions to ensure:

• They are tailored as narrowly as possible to advance the employer’s interest, and to refrain from restricting an employee’s Section 7 rights
• They explicitly state employees have the right to engage in concerted activities under Section 7
• Where necessary, they provide an explanation of how the rule or policy does not preclude employees from exercising their Section 7 rights
• Where possible, they include a list of specific rights the employer is not intending to restrict. Talk to us for recommended language.

Continue Reading Handbook Review Takes on a New Meaning: NLRB Adopts “Employee-Friendly” Standard for Evaluating Workplace Rules